THE phrase 'getting a home is like striking the lottery' is used to describe the Singapore housing scene these days - and it is no wonder.
If the Housing Board's (HDB's) latest sale is anything to go by, it is getting harder to hit the jackpot.A sale that closed this week for just 316 flats attracted an unprecedented 5,147 applications - and this was for traditionally less attractive estates Hougang, Punggol and Sengkang.
This translates into a one-in-16 chance of securing a flat - far worse than the one-in-four chance for the same estates in June.
In HDB's August sale of 354 flats in popular, mature estates, the odds were an even more unlikely 29-to-one.
But just what lies at the heart of the current shortage? Is the high demand for flats genuine? Is it supported by strong economic fundamentals? Or is it just a manifestation of Singapore's infamous 'kiasu-ism' (the colloquial expression for 'being afraid to lose out')?
Housing experts seem to think it is a bit of both.
Singapore's buoyant economy is expected to grow 8 per cent this year - and 6 per cent next year.
Rising wages and good job prospects fuel the desire for homes. And with 2008 tipped as an auspicious year for marriage, the number of couples rushing to get on the property ladder is increasing.
Then there is the collective sale phenomenon that gripped Singapore this year - with year-to-date deals topping $13 billion. The wrecking ball has displaced many home owners, causing a supply shortage and a spike in demand for homes.
Singapore's spectacular property bull run has also driven private property prices up, pushing cash- rich home owners turned home seekers into the HDB resale market. These buyers have been setting headline prices, driving resale prices up and in turn pricing young couples out of the market.
Suddenly, new HDB homes seem so attractive, almost regardless of location. Couples who previously never considered less central estates such as Punggol, Sengkang, or Woodlands are thinking twice.
Associate Professor Tu Yong of the National University of Singapore's department of real estate blames collective sales for 'distorting the market'. Still, she reckons that as long as the economy continues to perform, demand should be genuine - and sustainable.
Property agency PropNex chief executive Mohamed Ismail agrees, but adds there could be some 'froth' in this current high demand. Many fear prices will move higher so they are jumping on the bandwagon. Whether they really need a new home or can afford to wait, is another issue, he says.
Ultimately, there is no short-term solution - supply requires time to respond. With demand rising unexpectedly fast this year, supply has no chance of keeping up, says Prof Tu. And the painful truth for some couples is: They will just have to wait it out.
Even as many continue to call for immediate solutions, the Government has to be careful to avoid a future supply glut, which usually comes on the heels of high demand.
This might seem ludicrous now, but it happened during the last property peak of 1996 when long queues for flats vanished just as HDB laid the last brick in the massive batch of flats couples had demanded. This oversupply, of tens of thousands of flats, took years to clear and suppressed resale prices.
HDB's current build-to-order system - which builds flats only when a certain percentage of buyers commit - mitigates this risk, but newly-weds argue it is not the ideal solution as the flats will be ready only in four to five years.
For HDB's part, it is not enough to just lift supply but to do so in the right place, at the right time. Flats are still available in Jurong West, for example, but couples shun the area, even more than they do Punggol and Sengkang, due to its farflung location, proximity to industrial estates and perceived lack of vibrancy.
Granted, there is a limit to the number of flats that can be built in more popular areas. But perhaps a closer look at demand patterns will prevent supply and demand mismatches in the future.
Meanwhile, there have been suggestions that Central Provident Fund monies be used for the cash needed upfront in the resale market. But that itself will have larger implications which will require lengthy studies - and will not solve the apparent problem.
Ultimately, demand and supply imbalances are part and parcel of property cycles. The Government is right to ensure there will not be a supply glut repeat - but newly-weds should also learn to understand the market and ride out these demand and supply kinks.
Perhaps it is in their best interests to wait for a clearer market balance before making any decision to commit to a long-term home.
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